Find out how to smooth your mortgage and consumer loan monthly payments to pay off just one fixed monthly payment.
Credit smoothing: the principle
Loan smoothing is a financing method applied in the context of a mortgage, it consists of offering a constant monthly payment when there are several lines of credit. For example, a couple using a home loan and able to obtain a zero rate loan will end up with two lines of credit, the main loan . The bank offering the financing will generally offer a smoothing of the loan making it possible to repay a constant and fixed monthly payment for the duration of the loan. The first years will include and the main loan then when is fully reimbursed, the monthly payment will only consist of the mortgage.
Credit smoothing is very practical and some banks may also offer smoothing when loans are already in progress, if a borrower wishes to obtain a mortgage while the latter is currently paying monthly consumer loans, the bank can adapt and adjust the deadlines accordingly. Credit smoothing can be used in different situations, during a credit consolidation or even during a loan renegotiation.
Smooth a mortgage with consumer loans
Most households face different monthly payments with different end-of-repayment dates. When a household has monthly consumer credit outstanding and wants to obtain a mortgage, the first years will be difficult because the monthly payments will accumulate and then they will soften as the end of repayment of each consumer loan. The idea is therefore to readjust the repayment conditions to take advantage of a single constant monthly payment, sometimes even lower, to balance the finances of the household.
It is therefore quite possible to smooth the monthly payments by having several credits in progress, and for this we will resort to an operation that is called credit consolidation. It involves redeeming your various loans during repayment to take advantage of new repayment conditions and in particular a single monthly payment, which can be increased but also reduced. The whole point of this operation is to be able to smooth the repayment over a longer period by having a single fixed rate, the nature of the credit consolidation will mainly depend on the share of mortgage loan to be taken over. Note that it is even possible to add an additional amount, it is an effective solution to keep the same level of monthly payment and finance a new project.
Simulate a credit consolidation to smooth the monthly payments
Do you have several different monthly payments and would you like to smooth out so as to reimburse only one fixed and constant monthly payment? It is therefore strongly advised to carry out a credit buy-back simulation allowing you to set up a new contract with a fixed monthly payment, of the amount of your choice (depending on your repayment capacity). It is a free estimate and without obligation.